Correlation Between E L and E L

Can any of the company-specific risk be diversified away by investing in both E L and E L at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining E L and E L into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between E L Financial 3 and E L Financial Corp, you can compare the effects of market volatilities on E L and E L and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in E L with a short position of E L. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and E L.

Diversification Opportunities for E L and E L

0.95

Correlation Coefficient

E L  E L

Almost no diversification

The 3 months correlation between ELF-PH and ELF-PG is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial 3 and E L Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E L Financial and E L is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on E L Financial 3 are associated (or correlated) with E L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E L Financial has no effect on the direction of E L i.e., E L and E L go up and down completely randomly.

Pair Corralation between E L and E L

Assuming the 90 days trading horizon E L is expected to generate 1.42 times less return on investment than E L. In addition to that, E L is 1.0 times more volatile than E L Financial Corp. It trades about 0.14 of its total potential returns per unit of risk. E L Financial Corp is currently generating about 0.2 per unit of volatility. If you would invest  1,976  in E L Financial Corp on April 23, 2025 and sell it today you would earn a total of  112.00  from holding E L Financial Corp or generate 5.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

E L Financial 3  vs.  E L Financial Corp

E L Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in E L Financial 3 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, E L is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

E L Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in E L Financial Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, E L is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with E L and E L

The main advantage of trading using opposite E L and E L positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L position performs unexpectedly, E L can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in E L will offset losses from the drop in E L's long position.

The idea behind E L Financial 3 and E L Financial Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.